Integra Resources Corp. (TSX-V: ITR) (NYSE American: ITRG) and Millennial Precious Metals Corp. (TSX-V: MPM) (OTCQB: MLPMF) will join forces to create one of the largest precious metals development and exploration companies in the Great Basin.
The companies announced the merger deal on Tuesday and said their goal is to become a mid-tier heap leach gold-silver producer and generate significant value for shareholders.
They also announced an investment of $35 million by Wheaton Precious Metals Corp. (TSX: WPM) ( NYSE:WPM) (LSE: WPM) which equals up to 9.9 per cent of the issued and outstanding Integra shares.
“The industry is in need of consolidation, and the support amongst the investment community and from Wheaton for this merger and concurrent financing has been resoundingly positive,” Integra President George Salamis said in a statement.
The new company will have Integra’s past-producing gold-silver DeLamar Project in southwest Idaho and Millennial’s oxide-focused Wildcat and Mountain View Projects in western Nevada.
The new company will have a significant gold-silver endowment in the Great Basin, which is not owned by a major mining company. Along with the existing development pipeline, there is also potential for exploration in the BlackSheep, War Eagle, and non-oxide targets at DeLamar, as well as the Dune, Eden, Marr, Ocelot, Cerro Colorado, and Red.
Read more: Integra Resources DeLamar stockpile drill program results could extend heap leach mine life
Read more: Resources finds ‘unexpected’ positive results at Idaho’s DeLamar drill program
Merger to focus on low-risk and low-capital intensity heap leach projects
Under the agreement, Millennial shareholders will receive 0.23 of a common share of Integra for each Millennial common share they hold. Upon closing of the transaction, existing shareholders of Integra and Millennial will own about 65 per cent and 35 per cent, respectively, of the outstanding Integra shares (excluding the equity financing).
Based on the closing market price of Integra shares by the date of closing the cost per Millennial share is $0.18.
The combined portfolio of the two companies includes 10 high-quality gold and silver mines in different stages of development.
The total measured and indicated resource of the mines contains 2.6 million ounces of gold and 126.9 million ounces of silver, and the inferred resource contains 1.65 million ounces of gold and 16.4 million ounces of silver.
The merger will be focused on building a portfolio of low-risk and low-capital intensity heap leach projects located in the Great Basin. This strategy is meant to reduce the risks associated with single-asset development and production companies.
“The result of this transaction will be a combined company with a greatly strengthened balance sheet, an enhanced leadership team, and a high-quality asset portfolio with three flagship heap leach projects in the Great Basin,” Millennial CEO Jason Kosec said.
“This represents a significant step toward our long-term vision of building an industry-leading USA-focused mid-tier gold producer.”
Read more: NevGold submits exploration and expansion plans for gold project in Nevada
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The Great Basin. Photo by Kmusser via Wikimedia Commons
Great Basin, rich in natural resources
The Great Basin is a vast region in the western United States that encompasses parts of Nevada, Utah, Idaho, Oregon, California and Wyoming. It is characterized by a unique landscape of high desert plains, mountain ranges and scattered forests.
The region is also rich in natural resources, particularly precious metals such as gold and silver, as well as other minerals such as copper and lithium. Mining has been an important industry in the Great Basin for many years, and the region is home to a number of active and historic mines.
Some Canadian exploration companies based in Vancouver are also looking at the area given its potential. This month, NevGold Corp. (TSXV:NAU) (OTCQX:NAUFF) (Frankfurt:5E50) submitted an exploration plan of operations (EPO) to the Bureau of Land Management (BLM) for its Limousine Butte Project in Nevada.
The plan includes key risk-mitigating activities necessary for the project’s development. When it’s approved, the permit will allow expansion drilling around mineralization and into untested areas.
Other companies operating in the Great Basin include Newmont Corporation (NYSE: NEM) (TSX: NGT), Barrick Gold Corporation (TSX: ABX) (NYSE: GOLD), Kinross Gold Corporation (TSX: K, NYSE: KGC), Hecla Mining Company (NYSE: HL), Coeur Mining, Inc.(NYSE: CDE) and SSR Mining Inc. (NASDAQ: SSRM) (TSX: SSRM) (ASX: SSR).
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